VietNamNet Bridge – The announcement about the petrol price increase to VND25,000 per liter, plus the excursion fee increases at most of the tourist sites, have dealt a strong blow on travel firms which have been sparing every dong to stimulate the demand.

Petrol price hike makes travel firms worried stiff

Nguyen Cong Hoan, Deputy Director of Hanoi Redtours, said the transportation service providers – the partners of Hanoi Redtours – have not mentioned the service fee increases, but the travel firm still has to be ready for the new negotiations for new service fees.

“Under the contract we signed with the partners, the service fees must not raise or reduce the service fees even if the petrol prices fluctuate. However, if the petrol price increases too sharply, the partners are likely to break the contracts to avoid losses,” Hoan said.

Also according to Hoan, domestic tours and inbound tours would see the tour fees increase in one or two months, if the petrol price stands firmly at the high level.

Luu Duc Ke, Director of Hanoitourist, also thinks it’s very difficult to keep the tour fees at the current levels.

“The problem not only lies in the petrol price increase which would lead to the higher transportation cost,” Ke said. “Once the fuel price rises, the food prices and other services’ fees would also increase accordingly.”

He went on to say that travel firms would meet big difficulties when negotiating with domestic travelers about the tour fee changes. Meanwhile, they would have to accept losses with inbound tours, because foreign clients never accept re-negotiations about prices once the contracts are signed already.

Local authorities refuse tourism promotion programs?

The ancient capital city of Hue has decided to double the royal tomb sightseeing ticket price. The Hoi An ancient town has also increased the excursion fee by 30 percent. Dien Bien, Hanoi and Nha Trang Cities have also announced the excursion ticket price increases by up to 400 percent.

The decisions of the local authorities to raise excursion fees may put the travel firms’ efforts to stimulate the demand be in vain.

Hoan from Hanoi Redtours has noted that while the relevant parties all have agreed to lower the service fees to attract more travelers, local authorities stay outside the campaigns.

Transport firms and hotels, restaurants and retail points all have been running sale promotion programs to attract more clients. Even air carriers, which are always very conservative, have also agreed to join forces with travel firms to stimulate the demand by lowering the airfares. Meanwhile, the excursion tickets have become more expensive.

In fact, analysts said that excursion tickets only make up a small proportion of the total expenses, and the fee increases would not too much affect the tour fees. However, they commented that the move by local authorities to raise the excursion fees in their localities does not tone with the current movement of slashing service fees to stimulate the demand.

Ke has noted that local authorities seemingly do not respect the efforts by travel firms to develop tourism in their localities themselves.

“As far as I know, local authorities sometimes lay down the policies which come contrary to the watchdog agencies’ policies. However, they rarely consult with the Ministry of Culture, Sports and Tourism, the Vietnam National Administration of Tourism, let alone with travel firms,” Ke said.

To Quoc